BRITAIN'S debt pile is at a record £1.5trillion and growing as borrowing falls by less than expected, official figures released today show.

The amount of money owed now accounted for 81.5 per cent of Gross Domestic Product (GDP) at the end of June, up from 80.8 per cent just a month earlier, according to figures released by the Office for National Statistics (ONS).

At the same time borrowing fell by less than expected to deal Chancellor George Osborne a double blow in the first figures on UK's finances since the emergency Budget earlier this month.

Public sector borrowing in June fell £800million, or eight per cent, to £9.4billion from last year, but the drop has been predicted at 22 per cent over the entire year.

If the trend stays over the remaining nine months of the financial year, this year’s deficit would be £71.5bn, £2bn higher than the Office for Budget Responsibility (OBR) forecast in the Summer Budget.

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Growing debt has been fuelled by a growth in spending, which is now up to £58.1bn, around a four per cent increase compared to the same time last year.

Around half the money was spent by Government departments, such as health, education and defence, and around a quarter on benefits, including pensions and unemployment payments.

However, the Chancellor should be cheered by the boost to Treasury coffers with a rise in income tax receipts to £11.5bn, the best June performance on record since 1997.

The corporation tax take of £1.7bn also represented the best June on record.

The monthly figures were further lined by a £117m fine paid by Lloyds Banking Group over its handling of payment protection insurance (PPI) complaints.

ONS

Britain's debt has been rising rapidly since 2008

Samuel Tombs, senior UK economist at Capital Economics, said: "While June’s public finances bring less encouraging news on the pace of deficit reduction, there is no need for the Chancellor to panic yet.

"The overshoot in borrowing relative to the official forecasts entirely reflected stronger growth in current spending (2.9 per cent) than the OBR expects (1.0 per cent), rather than economic weakness.

"Indeed, annual growth in tax receipts of 4.4 per cent slightly exceeded the OBR’s forecast of 4.1 per cent.

"Accordingly, we do not think that June’s borrowing figures should ring any alarm bells yet."